Deflationary and

inflationary gaps
Deflationary and inflationary gaps

The deflationary gap

 The deflationary gap
W, J

J
O
Ye Y
 The deflationary gap
W, J

Deflationary gap
W
c

d J
O YF
Ye Y
 The deflationary gap
W, J, E

O YF
Ye Y
 The deflationary gap
W, J, E

E
a

Deflationary gap

O YF
Ye Y
 The deflationary gap
W, J, E

E
a

Deflationary gap

W
c

d J
O YF
Ye Y
Deflationary and inflationary gaps

The inflationary gap

 The inflationary gap
W, J

W
J

O Ye Y
 The inflationary gap
W, J

W
J

O YF Ye Y
 The inflationary gap
W, J

Inflationary gap

W
g
J
h

O YF Ye Y
 The inflationary gap
W, J, E
Y
E

O Ye Y
 The inflationary gap
W, J, E
Y
E

O Ye Y
 The inflationary gap
W, J, E
Y
E

Inflationary gap f

O YF Ye Y
 The inflationary gap
W, J, E
Y
E

Inflationary gap f

W
g
J
h

O YF Ye Y
Deflationary and inflationary gaps

Unemployment
and inflation
 Unemployment and inflation

AS1
Price level

O YF Y
 Unemployment and inflation

AS2 AS1
Price level

O YF Y
Deflationary and inflationary gaps

Effects of increases in
aggregate demand on
national output
 The effects of increases in aggregate demand
on national output
AS
Price level

O YP
National output
 The effects of increases in aggregate demand
on national output
AS
Price level

AD4

AD3
AD1 AD2
O Y1 Y2 Y3 Y4 YP
National output